Abstract
This paper studies the relationship between homeownership and completed fertility. We hypothesize that homeownership unaffordability decreases completed fertility by delaying the start of childbearing, thus, increasing the mother’s age at first birth. Applying a Cox Proportional Hazard model on the 2000 US Census and the 2015–2019 Panel Study of Income Dynamics, we show that renters delay childbearing relative to homeowners. Using the same methodology and the 2000 US Census, we find that renters in relatively unaffordable real estate markets delay the start of childbearing more than those in more affordable ones. Lastly, we use the 1990 US Census and an Ordinary Least-Squares regression, to show that women’s age at first birth is negatively associated with completed fertility. These results provide evidence that the lack of affordable (owned) housing delays the start of childbearing which reduces completed fertility. Thus, even temporary housing unaffordability, especially difficulty to transition to homeownership, might have long-lasting effects on the age pyramid.
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Data Availability
Data are available via IPUMS USA ( https://usa.ipums.org/usa/) and PSID (https://psidonline.isr.umich.edu/).
Notes
For other reasons related to postponed fertility, see Kohler et al. (2002).
The “lowest-low” is defined by Kohler et al. (2002) as a period in which Total Fertility Rate is below 1.3.
Note that we view homeownership as a preferred norm rather than a social norm as the latter has been questioned lately. For example, Brauner-Otto (2021) finds that the age at first birth is associated with ease of accessing homeownership; however, this relationship seems to change around 2007. The weakening/reversal of the relationship between homeownership and age at first birth might indicate that households give up hopes of becoming homeowners and proceed with fertility and, thus, having children while renting could become an undesirable but acceptable norm.
The female managers rate is the proportion of woman whose occupation is managerial (codes 0010-0430) according to the Census 2010 Occupation Codes out of all working women in a given geographic area.
Not the occurrence of the pregnancy, which can be terminated, but the arrival of the child.
This would be a case comparable to homeowner households, who for whatever reason did not manage to transition to homeownership before the first birth, but transition soon after.
Ideally, we would like to use the 2020 US Census data; however, we do not have access to it. Through IPUMS, we can access the American Community Survey (ACS) 2020; however, it is only a 1% sample. Given all the restrictions we place on the data, the sample becomes very small to have any meaningful results. The 2010 US Census is also not feasible as the 10% sample is unweighted and the ACS data suffers from the above-discussed shortcoming of small sample size.
Note that this assumption may be incorrect if rent-to-own type programs were very widespread in the USA; however, to our knowledge, this is not the case.
Homeowners might transition to become renters in several situations including divorce and selling property at older age to rent and live off housing wealth. Both cases are irrelevant in our sample that consists of relatively young couples.
These households can be double-income households and compared to single-parent (thus, single-income) households, may be systematically different in their decision to start childbearing and linking it to the ownership of a dwelling.
In some rare cases, we might be misclassifying families as childless. This could be the case if, for example, the child aged less than 6 years old resides outside the household. Examples include living with grandparents or in foster care.
We restrict the sample to mothers aged 23 years old in 2000 as we track the childbirth activity 5 years before 2000. This restriction ensures that women were at least 18 years old when having their first child. For additional robustness, we perform our analysis while restricting the mother’s age to 18–45, 18–40, and 23–40. All the results are robust and available from the authors upon request.
We recognize that due to nature of the Census data we might be classifying some mothers as childless where indeed their children are old enough and have left home. We also recognize that pregnancy may have ended in miscarriage, stillbirth, or the child did not survive by the time of the survey. Given the data at hand, we cannot identify these cases and simply assume that those cases should not be systematically different between homeowners and renters.
PUMA identifies the Public Use Microdata Area (PUMA) where the housing unit is located. In the 1990 State sample, PUMAs generally follow the boundaries of county groups, single counties, or Census-defined “places.” If these areas exceed 200,000 residents, they are divided into as many PUMAs of 100,000 + residents as possible. More details can be found here: https://usa.ipums.org/usa-action/variables/PUMA#description_section
Note that the PUMA level variables are computed from the 2000 US Census before imposing any restrictions.
The samples of women aged 23–40, 18–45, and 18–40 yield similar results available from the authors upon request.
Note that both high rents (leaving little savings) and high prices of dwellings can prevent homeownership, so rental prices could be used in this analysis as well. If prices and rents were perfectly correlated, we would be indifferent which one to use. However, we find a low correlation between the two, with every 1% change in home values being associated with 0.38% change in rents. This could be the case since many cities have various forms of rents controls, so despite rents being relatively stable, home prices can grow very fast impeding households from buying a home. For this reason, we use home prices/value in this analysis. We estimate Hypothesis 2 using rental prices instead of housing prices. The results are similar and available from authors upon request.
This was not a major issue when we were testing Hypothesis 1 since the families we were considering had their first child in the last 5 years, and we limit women to be below the age of 45 so their children tend to be young to leave the household.
Note that women in the 1990 Census sample and the women in the samples used for Hypothesis 1 and 2 most likely faced different socioeconomic conditions. Yet we make the assumption that the previously observed relationship between early births and fewer children is maintained for current cohorts of women, which has been shown in the literature (Berrington et al., 2015; Castro, 2014; Kocourková and Šťastná, 2021; Tocchioni et al., 2021). Also, even if women in earlier generation had different socioeconomic conditions, the recent cohorts are starting childbearing at a much older age where biological factors play a relatively more important role than other differing socioeconomic factors between cohorts.
We also perform all our analysis on a sample where we do not restrict the number of children born to the number of children residing in the household. Results are similar and available from the authors upon request.
We add PUMA level variables following Simon and Tamura (2009) who argue that geographic area variables might capture unobserved heterogeneity affecting both relative prices and tastes regarding children’s quantity and quality. For example, areas with high female labor force participation or high median income might have a higher opportunity cost of childbearing than other areas.
The hazard function measures the instantaneous risk of the event happening (in our case having a child) at time t, conditional on not having a child until that time.
Observations for which the event does not occur by the end of the study are defined as censored observations in the Cox model literature.
We also cluster on the state level. The results do not change and are available from the authors upon request.
When estimating the COX model, Stata drops the observations that had their first child in 1995 assuming that they exited the study at the beginning of the timeframe. In line with the usual practice to keep these observations in the sample, we add a constant (0.5) to the time to first childbirth for all the observations in our sample.
The Breslow method keeps all tied observations in the risk pool, whereas the Efron method considers all possible risk pools and assigns to them equal probability.
Using the − 0.613 estimate in our preferred sample (column 2), we can calculate the ratio of the hazard rates between renters and homeowners as exp(− 0.613), namely 0.541, implying that the hazard for renters is 45.9% of that of the homeowners. Relying on the similarity of the hazard rate with the failure rate (whose reciprocal is the time before the failure), the time until childbirth of the homeowners is 1/0.541 that of renters, meaning that renters wait time is 84.8% more than homeowners until the event.
Using the − 0.02 estimate in column 2, we can calculate the ratio of the hazard rates among renters facing different housing prices as exp(− 0.02), namely 0.98, implying that the hazard rate for renters decreases by 2% as relative housing price increases. Assuming that hazard rates are equivalent to failure rates, the renters wait time increases by 2% (1/0.98) as the relative housing price increases.
Results available from the authors upon request.
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Acknowledgements
The author would like to thank Tristram Harrison, Shahar Rotberg, Babak Mahmoudi Ayough, Kiana Basiri, and Chenghang Zhou for their advice while developing the manuscript. We are especially grateful to Joshua Angrist for his valuable comments.
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Japaridze, I., Sayour, N. Housing Affordability Crisis and Delayed Fertility: Evidence from the USA. Popul Res Policy Rev 43, 23 (2024). https://doi.org/10.1007/s11113-024-09865-8
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DOI: https://doi.org/10.1007/s11113-024-09865-8